Omg 18%

bluenose1

I can’t understand why they don’t cap energy prices at a sensible figure rather than letting energy companies make obscene profits. If many people find it difficult to pay bills then stops spending on other things and surely will only result in a massive recession, in addition to high inflation.

If we didn’t have an adult child at home for the foreseeable I can see the merit in living abroad for the winter months,would probably be cheaper to do that than stay here and pay winter bills.

I dread what it is going to be like for people on a low income when these bills kick in.

Silvertabby

sevenhills said:

Chickereeeee said:

I think that when people realise that a lot (most) of their final salary pensions are capped at 3 or 5% inflation increases, and that that they will be worth maybe 7-15% less (if inflation is 10-15% for just one year)

I have looked at mine, WYPF and it just says that it will increase with CPI inflation.
Most might assume the same. I thought increasing by CPI was poor, as RPI is higher and some have inflation plus 1% (NHS)?

The NHS CPI plus 1% is the annual revaluation of the CARE element of pension being accrued by current workers/members.  Deferred or in payment NHS pensions increase by just CPI.

Inflation has been low over the past 20 years, so private sector DB pensioners haven't really noticed their cap.  They will certainly feel the difference next year.

hugheskevi

Maybe helpful to recap private sector DB scheme indexation arrangements (Source: Purple Book 2021)

Notepad_Phil

bluenose1 said:

I can’t understand why they don’t cap energy prices at a sensible figure rather than letting energy companies make obscene profits. ...

The retail companies who are supplying the energy to your home are not making obscene profits e.g. British Gas has just released their figures - £98 million pre-tax profits in the first half of 2022 from their umpteen millions of UK households, which someone on the energy forum worked out as a little over £2 per customer per month.

If you're talking about companies in the wholesale market then the profits you see are worldwide, not just from the UK, and there's a whole bunch of reasons why you can't just cap their profits to suit the UK customer.

saucer

Notepad_Phil said:

bluenose1 said:

I can’t understand why they don’t cap energy prices at a sensible figure rather than letting energy companies make obscene profits. ...

The retail companies who are supplying the energy to your home are not making obscene profits e.g. British Gas has just released their figures - £98 million pre-tax profits in the first half of 2022 from their umpteen millions of UK households, which someone on the energy forum worked out as a little over £2 per customer per month.

If you're talking about companies in the wholesale market then the profits you see are worldwide, not just from the UK, and there's a whole bunch of reasons why you can't just cap their profits to suit the UK customer.

I’m not disagreeing but to be clear Centrica, the parent company, is reporting operating profits of £1.3 bn for the same period. I do think though that there is no such thing as a sensible level of cap. Someone would have to pay.

SouthCoastBoy

sevenhills said:

SouthCoastBoy said:

 From what the government is saying it also looks like people receiving benefits are also protected, it's the workers and people with private pensions that are going to take the hit

I have not seen anything that states benefits will increase with inflation, the state pension yes.
Poor people are getting hundreds £££s towards their energy bills, they won't get an inflation increase too.
More likely nothing or an increase to match wage increases.
The minimum wage could increase by 10+%

State benefits are currently linked to the sept inflation figure, this needs to be severed, totally unfair for benefits to increase with inflation when workers who pay for the benefits will most probably be receiving less than cpi in annual pay review.

ussdave

SouthCoastBoy said:

sevenhills said:

SouthCoastBoy said:

 From what the government is saying it also looks like people receiving benefits are also protected, it's the workers and people with private pensions that are going to take the hit

I have not seen anything that states benefits will increase with inflation, the state pension yes.
Poor people are getting hundreds £££s towards their energy bills, they won't get an inflation increase too.
More likely nothing or an increase to match wage increases.
The minimum wage could increase by 10+%

State benefits are currently linked to the sept inflation figure, this needs to be severed, totally unfair for benefits to increase with inflation when workers who pay for the benefits will most probably be receiving less than cpi in annual pay review.

I would much prefer that we argue for higher wages for workers rather than a race to the bottom for benefits claimants.  

zagfles

ussdave said:

SouthCoastBoy said:

sevenhills said:

SouthCoastBoy said:

 From what the government is saying it also looks like people receiving benefits are also protected, it's the workers and people with private pensions that are going to take the hit

I have not seen anything that states benefits will increase with inflation, the state pension yes.
Poor people are getting hundreds £££s towards their energy bills, they won't get an inflation increase too.
More likely nothing or an increase to match wage increases.
The minimum wage could increase by 10+%

State benefits are currently linked to the sept inflation figure, this needs to be severed, totally unfair for benefits to increase with inflation when workers who pay for the benefits will most probably be receiving less than cpi in annual pay review.

I would much prefer that we argue for higher wages for workers rather than a race to the bottom for benefits claimants.  

And an inflation spiral like in the 1970's where higher wages lead to higher inflation which leads to higher wage demands which lead to higher inflation...

rickenbacker330

It's good to know that the organisation responsible for ensuring inflation is maintained at 2% uses uncapped RPI to protect their final salary pensioners.

JoeCrystal

rickenbacker330 said:

It's good to know that the organisation responsible for ensuring inflation is maintained at 2% uses uncapped RPI to protect their final salary pensioners.

To be fair, they use uncapped CPI for their CARE pensioners and deferred members but still uncapped RPI for the final salary and CARE employees. Bank of England does get a sweet deal considering it is non-contributory (although it is at 1/95th of your salary each year instead). However, they are wise enough to ban any transfers at all so anyone joining this scheme can't transfer their pension scheme in either. Still, they got about 70 jobs openings at the Bank of England so maybe consider working for them? 

I am more forgiving about the Bank of England pension scheme since they got proper funds set aside rather than relying on the UK Treasury to cover the shortfalls.